Starbucks’ New WiFi Plan: Building Customer Loyalty

Howard Schultz’, CEO Starbucks, announcement yesterday on two changes in Starbucks’ WiFi services demonstrates how even a large corporation must pay attention to customers on a local basis. The announcement took place at the Wired Business Conference “Disrupted By Design”. I’ve written about Starbucks before and how they shift their business model to meet customer expectations.

There is a lesson for small and local businesses in this change at Starbucks.

First, starting July 1, 2010, WiFi service at Starbucks will be free. This move reinforces the neighborhood/community aesthetic at the heart of Starbucks’ marketing. The free model follows a trend already instituted at most airports and many other public spaces. Moving to a for-pay model is a disconnect in the “public plaza” feel Starbucks customers expect, especially after experiencing the free model outside the Starbucks store door.

This is the second step to free WiFi service at Starbucks, a couple of years back they shifted from a pure for-pay model with T-Mobile to ATT with a model featuring  two-hours free daily with a registered Starbucks card and small service charge following the first two hours in a day. Granted, that’s not an expensive proposition, but just typing it cramped my fingers and it confuses many less technically comfortable customers. This change is much easier for customers to understand and act on.

Second, a new Starbucks Digital Network will be introduced later this fall. A partnership with Yahoo! and featuring free access to paid sites such as the online Wall Street Journal and other premium sites, the Starbucks Digital Network offers a new reason for Starbucks to be the preferred choice for customers. McDonald’s wired up 11,000 of their restaurants in 2009 and offered free access to customers and McDonald’s coffee business is major competition to Starbucks, so this new Starbucks access model is probably a response to McDonald’s marketing.

Main Street businesses are always looking for a way to build loyal customer relationships and gain an edge over their competition. Small businesses can use this example from Starbucks as a guide for another way to find a way to differentiate themselves from their competition. Of course, a small business will probably not get the national or international news coverage nor will they probably be able to swing a deal with Yahoo! or other major corporations to present exclusive offerings, but small businesses can find equally enticing draws for their local customers.

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Building Your Customer List

McCormick & Schmick’s is a nice restaurant, really an upscale fish house, that started in the Northwest and now has tentacles reaching across the U.S., now with probably two-thirds of it’s restaurants east of the Mississippi River. One of the oldest restaurants in the chain has occupied it’s current location since 1892, but this business understands how to treat it’s customers and has made the leap into their third century of business.

I placed a dinner reservation there just this morning. The hostess took the usual information and then asked if I wanted an email confirmation sent to me. Now, email confirmations are not unheard of, but this one happening in my own neighborhood restaurant triggered my senses: McCormick’s has shifted their thinking to include drawing their customers into an online relationship.

Customer relations are fickle and a business needs to keep up with the trends and customer preferences. McCormick’s also recognizes that cooking and serving food is not their real business, their real business is being a place of entertainment for their customers, the food is one part of the entertainment customers expect when they come to a restaurant.

How does this idea inform your business? And what is your real business, the parallel to McCormick’s actually being in the entertainment business?

Addendum: Of course, I said “yes,” and I’ll give a report back on what McCormick’s actually does, now that they have my email address. 

What Does Starbucks’ Business Pause Say About The Customer And Small Business?

You could not miss the news yesterday: Starbucks closed their U.S. stores Tuesday night to spend three hours working on their customer service.

Starbucks is an incredible success story about meeting customer needs and desires. I don’t use the term “desire” lightly, Starbucks is really all about the desire, the customers desire. Visiting Starbucks is an event. Even when it is an extremely short visit, a drop into a Starbucks has a consistency and familiarity that screams out the value the company places on customer service.

And that’s why they closed for three hours, to raise their level of customer service. Although the specific activity taking place in all those 7000-plus Starbucks was barista training, the actual effect was to reinforce the customer experience and deliver better customer service.

So what does this mean to small business? Here’s a huge company, over 135,000 baristas in the U.S. alone, that stopped to refocus on customer service and a prime differentiator for their business. Small businesses everywhere have learned to use customer service as a differentiator from their competitors and especially from big business, this is a small business way of life: learn to Dance Among Elephants.

That a big company like Starbucks recognized this need for superior customer service demonstrates how important customer service is to all businesses. Even better, Starbucks plans to expand this refocus activity internationally to all their stores and include the 4000 licensed outlets, too.

Here’s my challenge to you: Take a few minutes, wander around you business. Is it time to refocus on your core business strengths? Is it time to renew your focus on customer service?

My Morning Of Customer Service Re-Thinking

The Friday morning commute was bright and early, I needed to be in my seat in Lake Oswego for a 7:30 am training session on customer service.

I was invited to attend by the speaker, David Aaker, of Aaker & Associates, a recognized national speaker and workshop leader on customer service, and a Chamber of Commerce President and CEO for over 20 years. I was lucky enough to meet David through Mike Osorio, the retail strategist and consultant, blogger of Dare To Be Contagious(tm), and Principal of the Orsorio Group.

David’s presentation confirmed once again that customer service is more than a goal, it is a constant process hat requires work. Of course, David made the two-hour presentation anything but work; he told great stories and presented lists of actions to take. But the big take-away of the morning was a refocus on the need to begin and continue communicating with your customer.

“Customer communication” is a theme I hear time and again, and it’s also a theme that I work on with my clients, helping them communicate with their customers. Customer communcation is even more important these days with the ubiquity of cell phiones, text message and other electronic methods of communication.

One poor customer experience can be instantly communicated to a dozen people, where ten years ago it might take a week or so and the bruisd experience might have passed beyond immediate recollection.

After the presentation, Michelle Rios, the executive and leadership coach, and the principal of Igniting Excellence, and I were fortunate to join David and Mike for lunch and continued the discussion on customer service. I’ll save insights on that conversation for later.